The Government Accountability Office (GAO) has frequently cited
poor cost estimation as one of the reasons for cost overrun problems in
acquisition programs. Software is often a major culprit. One study on
cost estimation by the Naval Postgraduate School found a 34 percent
median value increase of software size over the estimate. Cost overruns
lead to painful Congressional scrutiny, and an overrun in one program
often leads to the depletion of funds from another. This post, the
first in a series on improving the accuracy of early cost estimates,
describes challenges we have observed trying to accurately estimate
software effort and cost in Department of Defense (DOD) acquisition
programs, as well as other product development organizations.